A Korean Takeover of Lehman Could Be a Disaster

Posted by: Ihlwan Moon on August 23, 2008

News reports speculate government-run Korea Development Bank (KDB) may still buy distressed Lehman Brothers after Financial Times’ said earlier this week secret talks to sell up to 50% of Lehman shares to KDB broke down. Yet a KDB takeover of Lehman won’t probably be a solution for either of the two.

The reason: The Koreans simply don’t have the expertise to run a global investment bank and lack patience to let expatriate experts run the show and deliver results. With the fourth largest foreign exchange reserves in the world, Korea certainly has enough money to rescue Lehman. And the country appears to have the political will, with President Lee Myung Bak’s government talking about the need to make Seoul a financial hub in Northeast Asia.

The problem is Korea’s management culture. The only way for Lehman to rebuild trust and business is letting able financiers take charge and work on his strategy. Unfortunately, the track record so far shows the Koreans can’t sit back and wait until foreign experts deliver results. One bad example: Hyundai Motor churned through four top executives in five years in its U.S. operation.

Reader Comments

md3

August 23, 2008 3:55 AM

It seems the author said that some 'able' Lehman bankers lost tons of money; some 'not-so-able' Korean bankers made tons of money, and the resolution for Lehman is to find some new 'able' bankers to continue the show at Lehman.

henry

August 23, 2008 4:14 PM

Koreans don't have patiences to sit back and wait for experts of lehman brothers work their magic????
What experts? The ones that took lehman brothers to the doors steps of bankcurptcy

cybercul

September 5, 2008 1:30 AM

though i agree with the author in some degree, the writing only points out the disastrous aspect for korea.. not for lehman.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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